“The greatest difficulty in the world is not for people to accept new ideas, but to make them forget about old ideas.” ~John Maynard Keynes, Economist Copyright (c) 2011 by Donald F. Kuratko All rights reserved. Section III Achieving and Sustaining Entrepreneurial Performance This final section of the book outlines practical methods for achieving and sustaining high levels of entrepreneurial performance within organizations. ❖ Chapter Eleven: Constraints on Entrepreneurial Performance ❖ Chapter Twelve: Leading the Entrepreneurial Organization ❖ Chapter Thirteen: Assessing Corporate Entrepreneurial Performance ❖ Chapter Fourteen: Control and Entrepreneurial Activity ❖ Chapter Fifteen: Sustaining Entrepreneurial Performance in the 21st Century Copyright (c) 2011 by Donald F. Kuratko All rights reserved. Section III Achieving and Sustaining Entrepreneurial Performance Chapter 11 Constraints on Entrepreneurial Performance Copyright (c) 2011 by Donald F. Kuratko All rights reserved. Introduction ❖The pursuit of entrepreneurship within a company creates new and potentially complex sets of challenges on both theoretical and practical levels. ❖On a theoretical level, company-wide entrepreneurship is not included in, or accommodated by, most of the theories, models, or frameworks that have been developed to guide managerial practice. Introduction ❖On a practical level, managers typically find themselves in uncharted territory when it comes to entrepreneurship. They lack guidelines on how to direct or redirect resources towards entrepreneurial strategies. Obstacles and Effects of Traditional Practices Traditional Management Practices Enforce standard procedures to avoid mistakes  Manage functionality  Compensate uniformly  Obstacles and Effects of Traditional Practices Adverse Effects Innovative solutions blocked  Entrepreneur failure and/or venture failure  Low motivation and inefficient operations  A Framework for Understanding the Obstacles ❖ Systems ❖ Structure ❖ Strategic direction ❖ Policies and procedures ❖ People ❖ Culture Categories of Organizational Constraints on Corporate Entrepreneurship Systems  Oppressive control systems  Inflexible budgeting systems Structures  Too many hierarchical levels  Top-down management  Lack of accountability Categories of Organizational Constraints on Corporate Entrepreneurship Strategic Direction  Absence of innovation goals  No formal strategy for entrepreneurship Policies and Procedures  Extensive documentation requirements Categories of Organizational Constraints on Corporate Entrepreneurship People  Fear of failure  “Turf” protection Culture  Values that conflict with entrepreneurial requirements A Framework for Understanding the Obstacles ❖ Which constraints can be ignored? ❖ Which can be worked around? ❖ Which can be eliminated? ❖ Which can be converted into facilitators of entrepreneurship? ❖ Which must be accepted even if they limit the scope or scale of what the corporate entrepreneur can accomplish? More on the People Factor ❖ Management may be able to fix the structure and remove bureaucratic rules and procedures, but the challenges involved in getting employees to embrace entrepreneurship, change the way they do things, collaborate on projects involving untested ideas, and give up resources to support entrepreneurial initiatives can be especially vexing. More on the People Factor The pathways of most new ideas are blocked by:  Resistance to change  Making premature and uninformed judgments  Neophobia  Caution  Order  Anticipation of the extra trouble  Politics Limitations of the Corporate Entrepreneur ❖Lack of political savvy: learning to work the system ❖Lack of time: crisis management ❖Lack of incentive to innovate: beyond tokenism ❖Lack financial credibility: projecting the numbers Limitations of the Corporate Entrepreneur ❖Lack of people development skills: autocracy rules ❖Lack of legitimacy: untested concept and untested entrepreneur ❖Lack of “seed” capital: the problem of early resources ❖Lack of open ownership: protecting turf Limitations of the Corporate Entrepreneur ❖Lack of a sponsor: someone to watch over you ❖Lack of energy and shared enthusiasm: the inertia problem  Indifference  Distraction  Competition  Disaffection  Direct threat Limitations of the Corporate Entrepreneur ❖Lack of personal renewal: the issue of reinforced denial ❖Lack of urgency: fear as good and bad ❖Lack of appropriate timing: the resource-shift dilemma Corporate Innovators or Rogue Managers: An Ethical Dilemma Reasons managers involved in entrepreneurial activity may act in an unethical manner and take on the personality of a “rogue manager” ❖ “Wilding” ❖ Lack of proper ethics rooted in company culture ❖ Lack of proper ethics rooted in the individual manager Corporate Innovators or Rogue Managers: An Ethical Dilemma Reasons managers involved in entrepreneurial activity may act in an unethical manner (cont.) ❖ The manager may not clearly grasp their professional responsibilities ❖ Operational factors within the company may cause the manager to deviate from the parameters of the formal organizational structure – pulled in two directions An Ethical Dilemma? ❖ Moral Management Model – respect ethical considerations and hold the organization to the highest moral standards and demonstrate a strong ethical leadership to all stakeholders ❖ Immoral Management Model – based on the premise that economic opportunities are to be exploited whenever and however possible ❖ Amoral Management Model – managers, while not necessarily acting with malicious intent, believe that the rules of business are different from those of the greater society Overcoming the Obstacles and Limitations Building social capital  Sharing information  Creating opportunities for people to demonstrate their skills and competence  Building and using influence networks Gaining legitimacy Political tactics Resource acquisition Focusing on the Right Obstacles at the Right Time ❖ Who will take what specific actions against which opponent? ❖ What key implementation steps must be taken, and how should those steps be timed? ❖ How can we tell if things are not going as planned? ❖ What major contingency plans are needed, and what events will trigger those plans?
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